Everyone here talks about Apple's "30% cut" (which of course is nowhere near what Apple actually gets, as people don't take into account costs for the high transaction costs on these small purchases), but as someone who runs an App Store (and who has had to on numerous occasions here on Hacker News dispel the weirdly-pervasive myth that Apple makes meaningful money from their App Store, something trivially disprovable using Apple's earning statements), I will assert the difference is more to do with license transfer and fraud mitigation, two things users and developers alike often fail to realize are either hard or even necessary until after it is too late.

In-App purchases are tied to your Apple ID and can be recovered and reactivated by a receipt API on other devices you are logged in to: Apple wants you to use their API for this purpose to guarantee that buying new devices will not lead to the user having lost a ton of money in their software investments. Some developers in the Cydia ecosystem sell things themselves, and they have either draconian or broken device license transfer restrictions. Users still complain to me, even though I had nothing to do with their payment. For Apple, the issue is even worse, as it could keep a user from buying a new device (where Apple actually makes money: anything that stands in the way of this Apple will not tolerate).

Physical goods are also very easy to build fraud contros for, due to the requirement of a physical shipping address; the same is not true of digital goods: Apple has spent a long time building out fraud management for their digital goods sales, and I doubt they want the Apple Pay platform to suddenly be inundated with tons of "app developers" (a class of developer Apple clearly doesn't trust very much) to make people start to think Apple's app ecosystem is a massive source of credit fraud. Apple also likes separating user data from developers: you don't know your customers, only Apple does; for a physical good, that is obviously an impossible separation to maintain, but for digital goods I think they would rather continue to have all purchases gated through them so that all developers see are anonymized identifiers.

Hey, I didn’t want to suggest it’s about squeezing money. You are certainly correct, Apple is much more directly involved with in-app purchases, so they also take much more ownership and responsibility for it. (Though I would also argue that this has a lot to do with the status quo. In-app purchases were quite new and there were no expectations about how to deal with them and who gets what. Credit card transactions are old and established and to get in on them you have to be competitive when it comes to fees and at least as convenient.)

For in-app purchases Apple collects their 30%, for Apple Pay substantially less. That’s what this comes down to.

In think it more or less comes down to this: If you buy something you (potentially) use inside the app (an ebook, access to some server-side service you can use with the app, …) it’s an in-app purchase. If what you buy is something you use outside the app (a taxi, a pizza, all physical goods, …) you can use Apple Pay.

This differentiation has always existed. Until now Apple just didn’t offer any help with payment with the second category and you had to do it all on your own.

from the perspective of a retailer, how much does apple take in the apple pay scenario? is it 0.15% + standard credit card fees?

Apple worked it out with Visa/Mastercard they they get a cut of the interchange fees, so the retailer pays no extra fees from what they would normally pay.

The retailer would only pay the Stripe fee. If I understand correctly, Apple collects some fees from the bank (that they take from the interchange fee)

Cristina from Stripe here. The merchant/retailer only pays the Stripe fee (https://stripe.com/pricing) for Apple Pay transactions.

From the perspective of the retailer, the merchant is charged the standard Stripe fee (2.9% + $0.30).

Apple's guidelines. In-App purchases can't be used for physical goods, but must be used for anything that does stuff through the app.

I think Apple needs to check on this very careful just because of some services like Uber offer services through the app and don't sell a physical good.

The opposite of this is, that you can't use Apples tier-pricing for services like that just because of it's usage-dependant and is reflected through actions in the real world.

I wonder how much effort Apple is going to put into checking on this actually. Especially because of services like Uber sell the ride. But what if the direct contract partner would be the driver and any service provider like that would just process transactions for comfort - so acting like a payment gateway for drivers.

A valid point, but I guess Apple will change the terms of service or will define services like Uber as physical good, since the service affects the real world and can not be realised through in-app purchases. I think that is what it is all about. They do not want Devs to opt out of in-app purchases and adopt ApplePay instead.

I'm pretty sure a cab ride is a real-world, physical thing. Besides, Apple's Guidelines are really just that, and they can enforce at their discretion.

Two big differences. In-App purchases allow for smaller transactions where Apple Pay with Stripe would actually cost 33% for $1 or 18% for $2.

In-App purchases are setup beyond just handling the payment. You can restore purchases across devices and the distribution is built in. You could replicate this experience but it is nice to avoid having to sign up specifically to use a Camera app that has an in-app purchase photo filter.

> I don't quite understand what capitalized In-App Purchases means

https://developer.apple.com/in-app-purchase/

(sometimes abbreviated IAP)

Apple wants to take their cut on In-App purchases, with a lesser cut for Apple Pay purchases.

How long can Apple maintain this somewhat fictional dichotomy? 30% App Store / 2% Apple Pay. It's a HUGE delta.

With one Apple is providing the payment method. For the other Apple is providing payment method, distribution channel and store.

Actually, IAPs needs to be hosted and served by developers (contrary to standard app distribution). If the app sells virtual credits, it's not a problem; but if it sells data (e.g.: offline maps) then it might be one. Apple is not providing help there, they're only handling the financial transaction, and storing receipts of past purchases (so that apps can offer a button to reactivate past purchases).

That's not the case, Apple now hosts downloadable data (as of iOS 6 IIRC).